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New Deal for U.S. Manufacturers
HumanEventsOnline ^ | 09/29/2006 | Patrick J. Buchanan

Posted on 10/01/2006 3:30:13 AM PDT by NapkinUser

In July, our trade deficit hit yet another all-time record, $68 billion, an annual rate of $816 billion. Imports surged to $188 billion for the month, as our dependency on foreigners for the vital necessities of our national life ever deepens.

China's trade surplus with us was $19.6 billion for July alone, moving toward an all-time record of $235 billion for 2006 -- the largest trade deficit one country has ever run with another. Our deficit with Mexico is running at an annual rate of $60 billion. With Canada, it is $70 billion. So much for NAFTA. With the European Union, it is running at $160 billion.

America as the most self-sufficient republic in history is history. For decades, U.S. factories have been closing. Three million manufacturing jobs have disappeared since Bush arrived. Ford and GM are fighting for their lives.

Bushites boast of all the new jobs created, but Business Week tells the inconvenient truth: "Since 2001, 1.7 million new jobs have been created in the health care sector. ... Meanwhile, the number of private sector jobs outside of health care is no higher than it was five years ago."

"Perhaps most surprising," writes BW, "information technology, the great electronic promise of the 1990s, has turned into one of the biggest job-growth disappointments of all time. ... (B)usinesses at the core of the information economy -- software, semiconductors, telecom and the whole gamut of Web companies -- have lost more than 1.1 million jobs in the past five years. Those business employ fewer Americans than they did in 1998, when the Internet economy kicked into high gear."

Where did the high-tech go? China. Beijing's No. 1 export to the United States in 2005, $50 billion worth, was computers and electronics.

If Americans are the most efficient workers on earth and work longer hours than almost any other advanced nation, why are we getting our clocks cleaned? Answer: While American workers are world-class, our elites are mentally challenged. So rhapsodic are they about the Global Economy they have forgotten their own country. Europeans, Japanese, Canadians and Chinese sell us so much more than they buy from us, because they have rigged the rules of world trade.

While the United States has a corporate income tax, our trade rivals use a value-added tax. At each level of production, a tax is imposed on the value added to the product. Under the rules of global trade, nations may rebate VAT levies on exports, and impose the equivalent of a VAT on imports.

Assume a VAT that adds up to 15 percent of the cost of a new car in Japan. If Toyota ships 1 million cars to the United States valued at $20,000 each, $20 billion worth of Toyotas, they can claim a rebate of the VAT of $3,000 on each car, or $3 billion -- a powerful incentive to export. But each U.S. car arriving at the Yokohama docks will have 15 percent added to its sticker price to make up for Japan's VAT.

This amounts to a foreign subsidy on exports to the United States and a foreign tax on imports from America. Uncle Sam gets hit coming and going. It is as though, after firing a round of 66 in the Masters, Tiger Woods has five strokes added to his score for a 71, and five strokes are subtracted from the scores of his rivals. Even Tiger would bring home few trophies with those kind of ground rules.

The total tax disadvantage to U.S. producers -- of VAT rebates and VAT equivalents imposed on U.S. products -- is estimated at $294 billion.

Exported U.S services face the same double whammy. A VAT equivalent is imposed on them, while the exported services of foreign providers get the VAT rebate. Disadvantage to U.S. services: $85 billion annually.

Why do our politicians not level the playing field for U.S. companies?

First, ignorance of how world trade works. Second, ideology. These robotic free-traders recoil from any suggestion that they aid U.S. producers against unfair foreign tactics as interfering with Adam Smith's "invisible hand," which they equate with the hand of the Almighty.

Third, they are hauling water for transnational companies that want to move production overseas and shed their U.S. workers.

How could we level the playing field? Simple. Impose an "equalizing fee" on imports equal to the rebates. Take the billions raised, and cut taxes on U.S. companies, especially in production. Create a level playing field for U.S. goods and services in foreign markets, and increase the competitiveness of U.S. companies in our own home market by reducing their tax load.

U.S. trade deficits would shrivel overnight. And jobs and factories lately sent abroad would start coming home.

Isn't it time we put America first -- even ahead of China?


TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: alasandalack; buchanan; depression; despair; doom; dustbowl; freetraitorssqueal; grapesofwrath; patbuchanan; pitchforkpat; savage2008; savageforpresident; trade; votesocialist2008; woeisme
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To: o_zarkman44
Why do we import more than we export? Because Demorats have run off American industry with wacko environmantal laws, and taxation.

What I think you mean is LIBERAL. Don't assume that creature is confined purely to the ranks of one party...or even one administration (the Xlintoons).

Frankly, it appears to be bipartisan. And the current administration has done nothing but encourage the flight of industry...explicitly going out of its way to do so. Bally-hooing the "global" economy, and defending the purported lack of detriment to the outsourcing deluge.

Little did people expect we were getting Thomas Friedman running U.S. global economic policy...all of the White House staff has been expected to read his books.

It is time, if enough of the conservatives survive this huge expected purge in Congress...clearly intended to take them out...to have a "Come to Jesus" meeting with W.

If he was hoping for a liberal rat congress to push his regional globalism (Illegal Alien Amnesty, North American Union, etc) along...the conservatives should simply announce they won't oppose a RAT effort to impeach him...for whatever reasons. And threaten to more or less invite the RATs to do so...putting impossible pressure on Pelosi to resist her own MoveOn Base.

Time to play hardball.

201 posted on 10/28/2006 11:47:01 AM PDT by Paul Ross (We cannot be for lawful ordinances and for an alien conspiracy at one and the same moment.-Cicero)
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To: BikerJoe
Of course, that statement COULD be simply shortened to: "some of the problem also has to do with our toleration of the Chicoms".

BUMP!

202 posted on 10/28/2006 12:09:56 PM PDT by Paul Ross (We cannot be for lawful ordinances and for an alien conspiracy at one and the same moment.-Cicero)
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To: 1rudeboy; snowsislander
Do you really buy those numbers that were put out by the Clinton Administration? [A system since kept by W.]

Seems like they both have some explaining to do vis-a-vis this:


203 posted on 10/28/2006 12:14:03 PM PDT by Paul Ross (We cannot be for lawful ordinances and for an alien conspiracy at one and the same moment.-Cicero)
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To: NoControllingLegalAuthority
A nation that manufactures nothing IS nothing.

America is actually manufacturing more than ever, so America might be something after all.

204 posted on 10/28/2006 12:19:29 PM PDT by RightWhale (Repeal the law of the excluded middle)
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To: RightWhale
America is actually manufacturing more than ever

Let's see absolute numbers, of the actual #s of widgets by industry, before and after, to get a real comparison, not deceptive dollar amounts of the final sales.

The trade deficit is not appearing out of thin air. So let's get "real":

I.e.,
How many desktop computers?
Laptops?
Monitors?
Televisions?
Printers?
Scanners?
Fax machines?
Telephones?
Cell phones?
Lamps?
Furniture.
Light bulbs?
Hand tools?
Machine tools?
Electric Motors?
Transformers?
Magnets?
Railroad Locomotives?
Diesel Engines?
Heavy Construction Machinery?
Ships?
Maritime Cranes?
Forklifts?
Planes?
Steel?
Copper?
Aluminum?
Jet engines?
Titanium?

In some areas we indeed may actually be making more. Great.

But for a realistic policy evaluation...we need to get a real sense of the forest for the trees here. And I suggest that the trade deficit gives you a better idea of the forest...than those few trees of the singular good performers.

205 posted on 10/28/2006 12:40:43 PM PDT by Paul Ross (We cannot be for lawful ordinances and for an alien conspiracy at one and the same moment.-Cicero)
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To: RightInEastLansing
His irrational treatment of Israel leaves no doubt.

Uh, that could just as easily be said of G.W.Bush, frankly after the latest SNAFUs. Subsidizing Hamas. Ending Israel's chance to eradicate Hezbollah...after promising to back them. Insisting on the road map to nowhere peace format. Demanding that land for peace is the solution. And even, with Rice's latest detestable proclamations...demanding that Israel abandon Jerusalem.

So frankly, I am doubtful about your accusations.

I suspect you are wilfully mis-representing Buchanan quite a bit. The whole bigot schtick was a 'Bot attack from the 2000 campaign. And obviously the editors of Human Events, the heart of the Conservative Movement, don't agree with the Bush campaign's self-serving defamatory slants against Buchanan. Apparently they are still at it. They likely have a deal with McCain to back him in '08 [as an acceptable Globalist RINO], since they can't get Jeb in next.

As for the free trading neocons in the GWBA, the departure of Wolfowitz leaves them conspicuously Jewless. Not that either of us cares.

Precisely who does care? What a sad red herring. Where, for example, is Buchanan "caring" here about that?

And anyrate, purely as an aside, I think your example doesn't really support your assertion....i.e., you are aware that Paul Wolfowitz didn't depart precisely...he in fact was elevated by W , from being mere DOD Deputy Secretary...to head the World Bank.

Meantime, prior to the whole debacle over the attempted COOCP takeover of UNOCAL, and the UAE-DPW takeover of the British firms Penninsula & Orient's U.S. operations... The entire White House staff was encouraged en masse to be reading Thomas Friedman's books.

H'mmmm....you do know who he is, don't you?

206 posted on 10/28/2006 1:09:39 PM PDT by Paul Ross (We cannot be for lawful ordinances and for an alien conspiracy at one and the same moment.-Cicero)
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To: BikerJoe
Another LARGE problem is the short-sighted lemming-like quality of todays MBA.

Agreed. Perhaps they should actually be taking stock of some disturbing admissions by their own phoney free trade propagandists in the US Trade Representative's Office [White House for short]

Stunning Revelation: After Years in Denial, USTR Officials Admit Free Trade Deals Don't Necessarily Benefit U.S.

By Alan Tonelson
Saturday, October 28, 2006

“...our trade deficits are too high.  We can’t...pretend that the trade imbalance can just keep getting bigger with no cost.”
–U.S. Trade Representative Susan C. Schwab, March 20, 2006

“From Chile to Singapore to Mexico, the history of our FTAs [Free Trade Agreements] is that bilateral trade surpluses of our trading partners go up.”
–U.S. Deputy Trade Representative Karan Bhatia, October 24, 2006



Sources: “Remarks by Ambassador Susan C. Schwab, Deputy United States Trade Representative, Thunderbird University, Glendale, Arizona, March 20, 2006,” http://www.ustr.gov/assets/Document_Library/Transcripts/2006/March/asset_upload_file968_9150.pdf; “Remarks by Ambassador Karan Bhatia, Deputy U.S. Trade Representative, Yonsei University, October 24, 2006, http://www.ustr.gov/assets/Document_Library/Transcripts/2006/March/asset_upload_file968_9150.pdf

Alan Tonelson is a Research Fellow at the U.S. Business & Industry Educational Foundation and the author of The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking American Living Standards (Westview Press).
<

207 posted on 10/28/2006 1:20:08 PM PDT by Paul Ross (We cannot be for lawful ordinances and for an alien conspiracy at one and the same moment.-Cicero)
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To: Paul Ross
a realistic policy evaluation

What policy is involved aside from international trade agreements? Do you advocate a policy such as reversing trade agreements or even the 14th Amendment?

208 posted on 10/28/2006 1:24:06 PM PDT by RightWhale (Repeal the law of the excluded middle)
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To: 1rudeboy; navyvet; cva66snipe
I've never understood that argument. In order to prepare for the upcoming conflict with China, we must make our entire economy less efficient now.

No...efficiency as you describe it is irrelevant. The issue is independence. Independence transcends the value of your "efficiency" in war.

Bear in mind (before I get trampled by protectionist strawmen arguments) that national security is a valid justification for protectionism. That being said, plastic lawn furniture is not a critical component of our national defense strategy.

So you keep pulling irrelevant examples out of thin air, trying to make a point which is insupportable. Do plastic injection molding machines have anything to do with manufacturing your "lawn chairs"? Do they have anything to do with Defense production? Are the manufacturers of the variety of machines necessary for both kinds of applications...civilian and national security related and mutually dependent? Answer: YES. There is a mutuality and synergy. This is necessarily so. Just as "no man is an island" neither is any one manufacturing industry isolated completely from its defense implications. There are multiplier effects issues, preparedness issues, and capacity and engineering issues. They all add up.

So with your one supposed "confounding" example challenged....it behooves you to be a little more open-minded about the risks being forced on the entire society...by the few who are ideologically or remuneratively hide-bound to favor imports over U.S. capability. And before you rely reflexively on the vast reserve power of the U.S. economy to overcome such issues, explain this one:

Will U.S. Become Second-Best Superpower?
By Alan Tonelson
Thursday, October 12, 2006

The Congressional Budget Office (CBO) study, “Options for the Navy’s Future Fleet,” discusses second-best alternatives to the 30-year shipbuilding plan proposed by the Navy. And the gap between second-best and the Navy plan is vast.

The Navy plan is itself modest. It would initially expand the fleet to 330 ships in 2019, but then fall back to 294 by 2035. Today, there are 282 warships in service. Ten years ago, the Navy had more than 450 ships; 20 years ago, it had 555.

A 1982 CBO study had a different tone. “Once the indisputably dominant power at sea, the United States has seen this dominance erode over the past two decades,” it said. “Between 1970 and 1980 the total number of ships in the U.S. Navy fell from 847 to 538….Although the remaining ships are newer and more capable than those retired, the Navy now has substantially fewer ships with which to sustain its peacetime commitments or to conduct wartime operations.”

Its title was “Building a 600-ship Navy.” Has the United States gone into relative economic decline during the last two decades, so as to reduce its ability to maintain a fleet, as happened to other great naval powers in history like Spain, the Dutch Republic and Great Britain?

Critics of the Navy plan say it is “wildly unaffordable,” because it would increase shipbuilding by $10 billion a year (CBO estimate), double the average budget of the last decade. But the last decade was a low point, based on a post-Cold War euphoria which proved a delusion.

The world is the same dangerous place it has always been, and American vital interests remain global. Yet, the percent of gross domestic product spent on maintaining military force levels over the last decade was the lowest since the isolationist-depression era of the 1930s.

Another $10 billion out of a federal budget that will hit $3 trillion in 2009 does not seem “wild.” The CBO projects rising tax revenue and a budget nearly balanced by 2012.

It is clear from the CBO downsizing scenarios that the Navy will not be able to maintain a full spectrum of robust capabilities. It would have to choose whether to have a battle fleet based on 11-12 carriers, a strong undersea fleet of 55 nuclear submarines, or a fleet geared toward projecting power ashore.

The error is to assume that operations in any of these sub-capabilities could be successfully carried out with a weakened posture in the others areas.

In a lengthy analysis in the Sept. 11 Defense News, “The Fleet We Need,” Frank Hoffman chose a fleet “to improve our capacity to execute sea denial in key choke points and penetrate ashore against real threats we face today.” It would emphasize “operations close to shore.”

Plans to build advanced warships like the DDG1000 were to be scrapped. Aircraft carriers and Burke DDGs would be cut in favor of Littoral Combat Ships and amphibious units. But this assumes that over the next three decades, no rival will develop the capability to shoot back and dispute the permissive operational environment that Hoffman takes for granted.

His reliance on unmanned, long-range strike systems to replace carrier air power assumes no aerial opposition. The Navy can sail across empty seas and attack rustic villages with ease.


Click here to read the article...(subscription required)



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209 posted on 10/28/2006 1:45:42 PM PDT by Paul Ross (We cannot be for lawful ordinances and for an alien conspiracy at one and the same moment.-Cicero)
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To: RightInEastLansing
Has anyone informed the Swiss yet?

Tell me when the Swiss Army last rescued Europe....LOL!

No offense to the Swiss, but in the larger scheme of things, they are a bit player. The Swiss, along with the rest of Europe, have been able to be protected under our umbrella.

The U.S. has to remain as the defender of Freedom. And in that role...it must keep its manufacturers to be ready and prepared.

210 posted on 10/28/2006 2:03:31 PM PDT by Paul Ross (We cannot be for lawful ordinances and for an alien conspiracy at one and the same moment.-Cicero)
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To: hedgetrimmer

The anticipated "reversal of roles" is of much broader scope and import, and much more problemmatic than Bernanke and Bush imagine, I am afraid. They are frankly too wed to wishful-thinking.


211 posted on 10/28/2006 2:06:48 PM PDT by Paul Ross (We cannot be for lawful ordinances and for an alien conspiracy at one and the same moment.-Cicero)
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To: NapkinUser

Don't expect to get a lot of high-fives for this one. The free-trade religion is strong here. They'll give you tons of facts and figures to show why it's actually a Good Thing to let foreigners have all the heavy industry. What they won't tell you is what happens when everything goes boom. And, sooner or later, everything WILL go boom. You can bank on it.

***

NATIONALIST ECONOMICS:
WHY "EVERYDAY LOW PRICES" ARE BAD FOR AMERICA

Q. Why pay more for goods made domestically?
A. National security.

1. History demonstrates that any nation with a weak manufacturing base is at the mercy of those with stronger manufacturing bases should war come.

2. War always comes.

3. Therefore, in order to avoid being at the mercy of other nations, the United States should maintain a strong manufacturing base, by whatever means are necessary.

QED

***

"No boom today. Boom tomorrow. There's always a boom tomorrow." - Susan Ivanova (Claudia Christian), BABYLON 5, "Grail"


212 posted on 10/28/2006 4:40:03 PM PDT by B-Chan (Catholic. Monarchist. Texan. Any questions?)
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To: Paul Ross

All I have seen in congress on those issues you mention is appeasement. All talk and no action.

I have to agree with you that the selling out of America is indeed a bi-partisan conspiracy.

Although the House chamber has had the toughest legislation on immigration, but been snubbed by the Senate with weaker language that appeases the critics of immigration control.

Clearly the Senate should take a hit. Then we know nothing will be accomplished except a futile effort by DemoRats to impeach Bush.
Reset to 2008. After 2 more years of nothing accomplished, a major house cleaning in congress should take place if we are going to survive as a great, sovergn nation.


213 posted on 10/29/2006 7:36:15 AM PST by o_zarkman44
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To: Paul Ross
The GOP and DEMs are both too busy making the Kennedy and LBJ dream of achieving The Great Society a reality to worry about national defense.
214 posted on 10/29/2006 10:15:16 AM PST by cva66snipe (If it was wrong for Clinton why do some support it for Bush? Party over nation destroys the nation.)
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To: B-Chan
There's always a boom tomorrow." - Susan Ivanova (Claudia Christian), BABYLON 5

Not a bad motto!

Of course, I didn't know Claudia Christian had a wild side!


215 posted on 10/29/2006 7:29:23 PM PST by Paul Ross (We cannot be for lawful ordinances and for an alien conspiracy at one and the same moment.-Cicero)
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To: Hardastarboard

"What I'm getting at of course is that it's regulations that are killing our manufacturing, not some silly tax policy that our competitors have. We're doing just fine at killing it ourselves, thank you very much."

Your point is well taken about our excessive regulations and their impact on trade. However, it is OUR OWN tax system which is at the core of the problem that Pat Buchanon points out. It is our own legislators operating on our behalf who have crafted a tax system which puts US producers at a disadvantage in the global marketplace. Only those same legislators can address the disparity, not some foreign legislative body. They will only do so when we demand it.


216 posted on 10/30/2006 2:31:48 AM PST by phil_will1 (My posts are in no way limited or restricted by previously expressed SQL opinions)
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